Foreign investment in IT posts 11pc growth, software export grows to $1.4 billion

[Naveed Yaseen]

By Muhammad Yasir
KARACHI: The Foreign Direct Investment (FDI) in Information Technology sector reached to $35 million with a modest 11 percent growth in the first quarter of the current fiscal year as against last fiscal, State Bank reported.

According to the SBP statistics, the investment in software development recorded $9 million with growth of 165 percent in the first quarter. Investment in hardware development and IT services recorded negative growth of 70 percent and 5 percent to $0.1 million and $26.7 million, respectively.

President Pakistan Software Houses Association (P@SHA) Jehan Ara told that the IT sector is still attractive for FDI as the business of the software houses is expanding.

She told that the number of qualitative software producing firms have been increasing in the country since the beginning of this year as the association has given membership to 20 software houses so far while more members would be affiliated by the year-end.

PASHA is the representative body of software houses having 400 members.

She said that some six companies have brought handsome investment from US in IT sectors. This investment inflow is, however, not up to the expectations because the US is passing through financial mayhem.

She further added that Pakistan could benefit in the next quarters if US and European countries continue outsourcing in the world.

She explained that IT exports may register significant growth as the local and international scenarios are not sound for this sector, however, she said the local business and IT enabled services are continuing to increase.

“Pakistan’ exports have touched $1.4 billion according to the World Trade Organisation’s formula so far and it has a potential to increase it manifold within few years,” she added.

The government is expecting growth in FDI this year despite its negative growth in the last fiscal year.

In the overall communication sector, the FDI declined by 25 percent to $269 million in the first quarter of 2008-09 as compared with $397 million of the corresponding period of last fiscal year. However, this sector posted the highest investment inflow in 35 potential sectors of the country.

The investment inflow in the telecommunication sector declined by 29 percent to stay at $259 million in the same period while it attracted $364.5 million in the last year. The postal and courier services attracted $1.2 million in the first quarter of 2008-09.

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